Tartu Mill denies involvement in EUR 1.2 mln VAT fraud

The grain processing company Tartu Mill that was on Monday charged with participation in a 1.2 million euro VAT fraud finds the charge unjustified, saying that only a former employee was involved in it, reports LETA/BNS.

"Tartu Mill considers the charge brought against it to be unjustified and is prepared to defend its rights in court," the company's legal adviser Ivo Raudjarv said.

"The prosecutor's office has by now carried out a very extensive and thorough investigation. Starting in 2013, the criminal proceedings used massive surveillance and examined various possible versions, and found that one former employee of Tartu Mill was connected with the criminal group. The investigation did not establish that Tartu Mill belonged to the criminal group or that it was possible for the company to benefit from it," the lawyer said.

The company cooperated with the investigators but some of its observations were left without attention, he added. "The charges stem from the hypothesis that cash returned via front companies controlled by the group to members of the group and a part of it was used to pay farmers for their goods without paying VAT while the rest remained at the disposal of the crime ring. Yet it has been overlooked that Tartu Mill did not benefit at all from this whole process and the process did not improve its business in any way, either, which members of the crime ring have admitted as well."

The Southern district prosecutor's office on Monday charged Tartu Mill with submitting false data in its VAT returns as a result of which the state lost 1.2 mln euros' worth of value added tax. According to the statement of charges, the company reported false data from January 2012 through September 2013.

If found guilty the company could be fined up to 16 mln euros.

The company's former purchasing manager is accused of running the fraudulent scheme with the help of an eight-member criminal group. The collected evidence indicates that members of the ring used more than 30 front companies to declare transactions which in reality did not take place. Six members of the group were convicted in a plea bargain by the first-tier Tartu county court already in 2014.

The investigation was conducted by the Tax and Customs Board and directed by the Southern district prosecutor's office.

“Knowing entrepreneurship”: challenges for the Baltics’ authorities There at least two main world’s resources for analysing entrepreneurship: the World Bank yearly reports “doing business” and the OECD regional/national analysis. For already eight years the Amway reports are becoming popular as well. These reports make policy makers better understand the ways to assist business.